Small Business Finance – Banks Cite Risks For Lack of Small Business Funding

Federal Reserve chair Ben Bernanke is upset over sweeping inconsistency in small business loan approvals in the United States. Bernanke says that banks throughout the nation are denying loan requests from credible small businesses. He urged banks to stop being passive, and start being more active, by lending more to small businesses, adding that they are “crucial to America’s recovery.”However, bankers feel disillusioned over Bernanke’s sentiments. They earn money on each loan that they issue. There is a profit-driven motivation for banks to lend. It would seem to be illogical for a bank not to issue a loan, to a credible small business. Most bankers feel that there are fewer businesses to lend to, but are eager to start lending to creditworthy candidates.Banks versus Washington, and the risks of lending.The problem remains the same, there is a gap between what the government wants versus the banks. Therefore, the urging by Bernanke seems to be valid from the standpoint of trying to ignite a spark of motivation in the system. Banks remain apprehensive to initiate a loan, without the backing of solid credit history.Banks are dealing with their own problems, including the latest credit crunch, and shrinking consumer spending. Small businesses have seen their property values dwindle, and funding being limited.Therefore, risk is hard to accept when it comes to lending. In states where there are large deficits, risk becomes more of a problem. Small businesses who have felt the added pressure of the decline of a state’s economy may have bad debt, foreclosures, and may face a worsening attitude about lending overall.The environment for bank lending at this moment is volatile at best. With businesses seeking to reduce their debt, consumers earning far less money, and markets continuing to level-out, it is uncertain when confidence will be seen in the power of lending. As this happens, consumer prices are being lowered to reflect the economical shift; thereby accentuating big business who can afford the cuts, and the minimizing of smaller businesses and niche markets who cannot.Legislation is also a key concern of many lending agencies and small businesses. Health care reform has businesses up-in-arms about what to do, and how they will be classified with the reform. They are unsure what the tax burden may be, and are worried that they will incur a tax burden too heavy to bear.Overall, confidence is what will spur the change in both areas.Washington is trying to motivate the lending world, with legislation such as H.R. 5297, TARP and the codenamed “TARP Jr.” all of which aim to help with small business lending. Most banks argue that the problem is creditworthiness. Lenders are reticent about any legislation such as TARP, but it must be stated that it never requires lending agencies to do actual lending, it only adds the incentive to do so. Therefore, there is not much of a reason for banks to argue against legislation such as TARP or small business lending programs.Ultimately, banks hold the power and are hesitant to give out loans to businesses they see as risks. However, there is always risk associated with lending; it is up to the lending agency to determine how much risk to bear, and at this time, they want to keep the tide in their favor.Some people agree that not all the blame can be put on the banks. It is easy for the media to vilify banking, and “big corporate” entities. However, every loan a bank makes is also scrutinized by Federal regulators. If a bank makes a loan that is not profitable, they must set aside cash to offset the potential loss. Therefore, why would a bank want to make a loan that is too risky? Some people also argue that regulations should be decreased to allow banks to make riskier loans, but this line of thinking seems flawed at best. The housing collapse was a direct result of mortgage lenders who took advantage of a lack of specific regulation regarding risk assessment, thereby making profit on loans that they knew could not be afforded over the long-term. It is obvious the blame is both on greedy lenders and naive borrowers, in that situation.Some argue that it is Obama’s fault.Others blindly put the fault on the Obama administration citing that debt spending will doom the economy. And that the federal government has somehow incited uncertainty in the market. However, the facts are easier to discern. During the Bush presidency, national debt almost doubled. It has almost doubled again since then. And since 2007, the national debt has increased at a rate of 4.14 billion per day. It also must be noted that first-term presidency’s experience the debt of the previous 4, or 8 years of legislation that they did not oversee. Small business owners feel that the government just adds to the red tape associated with operations. Most feel that they are already burdened with too much debt. They are less inclined to hire more workers due to the shrinking of capital, and the uncertainty of confidence in Washington.Others believe the banks are at fault.Many argue that the reason there are so many unworthy candidates for loans is because of a banks power to freeze credit, or tighten lending practices. Consumer confidence is also related to credit. If there is a freeze in credit, potentially as it is now, then confidence in the financial industry will fall. Other logic dictates that lending is about risk-management, if banks, who can acquire reserves at no, or very low costs, refuse to lend, then ultimately that is their choice. If there were virtually no risk with lending, the economy would be remarkable, and there would essentially be no, or very little risk taking with business loans. Therefore, the argument of citing risk as a problem does not seem to reflect the real sentiment of the banks; many feel that they just do not want to lend in the current economic condition.

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Starting a Successful Business Online – Building Your Business Education

Not too long ago one of my readers posted the following question on my support desk:How do I get started in internet marketing?It was unnecessary to post such a question. With over 1000 pages alone on my blog, and 100s of resources on my site, all he had to do was to decide what he needed to know and then read the resources available.Getting your business education is similar. However, you can really cut your learning curve if you stick to what you know and build on it. This is an area where many newbies fail: they choose to venture into topics they know nothing about without bothering to learn anything new.Your first step in building your business education so you succeed online is to determine what you already know. Then, ask yourself, how will this help you achieve what you want to achieve online?Next, if there’s something new you need to learn, like marketing, then choose three general books on the topic to get you started. Visit your local library to find books on marketing, especially internet marketing. Try to stick to titles that have been published in the last two years. This will help you start off with knowledge that is up to date, and you won’t waste your time implementing techniques that don’t work.If you can’t find any titles to help you, then visit free eBook directories and do a search. The most popular document directory on the internet is Scribd, and it contains millions of documents, including ebooks, and books on just about any topic you can imagine. You are sure to find something here that will help you learn what you want to learn.Another place to visit is Amazon. Amazon offers millions of books and magazines on just about any topic you can imagine. This includes audio books if you prefer audio. You’ll save a lot of money shopping here as many of the books are discounted, and you may even be able to buy used copies of the books you want, saving you even more money.The point here is this: start by learning the basics. This is how general books on a topic will do that. Once you’ve read three general books, you’ll have a good foundation on your topic. This will allow you to determine what you need to learn next in order to pursue a successful business.The truth is, you only need to read about three books on a topic to become an expert and you’ll actually know more than most in the field.Learn what you need to know BEFORE you start your business. It will save you time and money and help you succeed faster.

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Local Google Advertising For Small Businesses

Everyone wants their company to Rank #1 in Google (or as close as humanly possible).What if you sell products or services LOCALLY?Would you want to field phone calls from a thousand miles (or more) away from your target demographic area? Would it do you much good to rank in Oklahoma if you only competed in Florida? There is such a thing as LOCAL Google search results. Before we get too carried away, be advised there are 3 parts to a Google search page and one of those is specifically local.- Anatomy of a SERP
- What is a serp? “Search Engine Results Page”. They are divided into 3 distinct sections.
- The Local Business Listings
- The Organic or Natural (main body of search listings)The Sponsored listings/ Paid listings/ Straight Advertising or in other words Google AdWords Number 3 can sometimes be split in 2 places: AdWords are always on the right side of a SERP, but depending on the volume of searches (and the volume of people paying to rank for a given keyword) sometimes sponsored listings are at the very top of a search result page. Google is far and away the largest search engine but not the only one on the planet that people use; Yahoo, Bing and AOL search,, and every yellowpage clone I’ve seen lists the sponsored links prominently at the top before any eyes ever get to the main body of listings.Google shows different results to those out of town than they show to people locally (that includes you). Google can do this because they knows quite a bit about you, before you ever hit the “search” button. If someone is searching for X locally (and Google knows that hypothetical person is physically searching IN said locality) the Google Maps listings will display above the organic listings.If said person is searching for X product or service in a given location and they are NOT physically located within said locality, the local business listings (Google Maps) will show up in the middle of the organic listings.What you want to do as a business owner is to get your company website to rank in 2 or more of the 3 available slots. My research shows me that it seldom does a company good to rank in the organics if they are not ranking in the Google Maps. Similarly if you are found in the top of the Googlemaps but not in the top ten organic listings this can severely lessen the number of phone calls or inquires your advertising is attempting to receive.If you (or the SEO firm you contract with) manages to get your business in all 3 slots in a serp, that’s the brass ring of local Google advertising. Depending on the product/ service and the competition vying for those serp rankings, if you’re in all 3 spots of a serp, you are most likely to clean up. The reason is that your prospects are likely to assume that Google apparently thinks very highly of you if it lists you “everywhere”.For a fee, a competent search engine marketing firm can get your company listed prominently in 2 or more of those coveted Google segments. For a fee I’ll do it as well, but for free I’ll give you this much: Rename your website with the geographic area you wish to compete in and you’ll do much better than a competing website named something else.Hint: No one cares what your name is, I know you’re very proud of it, but trust me, the prospective clients you’re wooing care ONLY about 2 things: What they need and where they can get it.For example, I’m located in Maryland, so any client of mine who is paying me to rank statewide, will get a serise of blogs with Maryland in the title, in the domain name, in the opening paragraph of text and so on.

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